However, buying bitcoin on PayPal comes with its own warnings. Most importantly, PayPal does not allow you to include your crypto assets in a self-hosted private wallet, which means you cannot use it for anything other than resell it to PayPal once the price goes up or down. The essence of cryptocurrency is the ability to own private digital cash without relying on middlemen and send or receive it in a censorship-resistant manner. For now, getting cryptocurrency through PayPal is a safe way to get exposure to the asset class, but you can’t use it in ways it’s made to be used – as a free and open peer-to-peer (P2P) financial system without trusted intermediaries.
This is why we have prepared five methods to buy BTC with PayPal (well, not in all cases). The problem with using PayPal as a payment method is that it allows chargebacks, while Bitcoin doesn’t: there are scammers who buy Bitcoin from you with PayPal and then claim they haven’t received anything. Therefore, the selection of alternative purchasing methods is limited. However, it is worth having your own bitcoin that you can send and receive freely without any restrictions.
Buy Bitcoin with eToro
At the time of writing, eToro recently released its eToro crypto wallet, which allows you to store Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Dash, and Ripple directly from its trading platform. On the trading platform, you can buy Bitcoins with PayPal, but you have to withdraw them in the eToro wallet to be able to withdraw them elsewhere or send them to other people.
Getting Bitcoins through eToro is by far the easiest and most beginner-friendly way. Besides, PayPal also supports a variety of other deposit methods.
Virwox is the virtual world exchange. You can buy a virtual currency called SLL (Second Life Linden Dollars), from Second Life – one of the largest virtual worlds – using PayPal, and then exchange it for Bitcoin. However, Virwox limits the amount you can initially deposit via PayPal or credit card, transaction fees are much higher than usual, and Virwox delays new user transactions up to 48 hours.
One of the most popular exchanges that aren’t quite an exchange, LocalBitcoins is more of a website that gives you the opportunity to find people in your area who are selling Bitcoin, and they make their own rules about what payment methods they accept. This means that there is a chance that they also accept PayPal payments.
Wirex is a company that provides virtual and physical Bitcoin debit cards. Since it is just like any other debit card, you can use Wirex’s card with your PayPal account. Still, this takes an unbelievably long time to complete – up to 10 days at a time, depending on where you live.
Paxful is incredibly similar to LocalBitcoins, but it’s smaller and less known. When you create an account, choose the payment method you want and the amount you want to buy and choose a seller manually or let Paxful find one for you. The downsides are high exchange rates and the possibility of being ripped off.